At first glance, this site seems fantastic! Great job! (As a side note, I've been reading Hacker news for years but have never been active; I created an account just to make this comment)
Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
21–30 of 132 posts
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#22CU suggestion: Kansas City's largest, CommunityAmerica Credit Union https://www.communityamerica.com/about-us
The more the merrier, but as far as I can tell, there are no public rates listed on the CommunityAmerica CU site. All behind a "get in touch" interact: https://www.communityamerica.com/personal/borrow/resources/m...
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#23Are those really standardized in the US? Where I live the condition vary widely. And basically the switching costs might easily dominate the total costs if you move/sell. I've found that taking this into account it was better to trade a few places in term of interests for better conditions.
Yes, extremely, especially for confirming loans: https://singlefamily.fanniemae.com/originating-underwriting/... Patrick McKenzie ( https://news.ycombinator.com/user?id=patio11 ) has a great deep dive on this: https://www.bitsaboutmoney.com/archive/mortgages-are-a-manuf... Closing/switching costs are certainly a consideration still, but the "Truth in Lending Act" (TILA) made it easier to compare the all-in cost by pr…
* conforming loans
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#24God I wish we had 30 year fixed mortgages here in Australia. Imagine getting one of those during covid when rates were below 3%. Incredible.
There are downsides. I have a really great rate on my mortgage, but our house is super expensive and small for our family… but now we can’t afford to move. If we moved to a new house, we would have to pay off this great mortgage and get a new one, at a much higher interest rate. Even if we found a house that cost the exact same as ours, the monthly payment would be 50% higher, because current interest rates are more…
If you were looking to buy a house right now, you'd be looking at a bunch of options that are worse than what you currently have. You experience this as lock-in but in reality the "problem" is just that you have something significantly better than anything you (or others) can find on the market right now. And of course that's actually a fantastic boon.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#25Earlier quoted context omitted.
There are downsides. I have a really great rate on my mortgage, but our house is super expensive and small for our family… but now we can’t afford to move. If we moved to a new house, we would have to pay off this great mortgage and get a new one, at a much higher interest rate. Even if we found a house that cost the exact same as ours, the monthly payment would be 50% higher, because current interest rates are more…
Do 30-year mortgages make the other houses more expensive somehow? It sounds like you got a good deal and any change would be worse than the good deal you got. I'd appreciate it if I was you. Edit: unless you mean that the downside of 30-year mortgages is you hardly get to pay off the principal in the first several years and don't build much equity maybe? That's more a "long mortgages" thing.
I appreciate the good deal we have, but my point is that long term fixed mortgages really complicates the housing market and can make it so you are stuck where you are, especially if you buy a house when rates are low.
Think about what happens. My wife and I wanted to buy a house. Our budget is mostly around what we can afford as our monthly payment, just like everyone else. That means if interest rates are low, we can afford a much more expensive house (obviously). Ok, so we buy one with a payment we are comfortable with.
Now, rates go up. Say we need to move for a job, so we need a new house, and we still have the same budget. Well, that means the total cost of the house we can afford is much lower, because the higher interest rates means the total loan value must be much smaller to keep our monthly rate the same. If we were first time buyers, this is fine, because everyone is in the same boat; everyone has a smaller budget because monthly payments on the mortgage are higher, so housing prices should be lower. If that is the case, though, it means the house we are trying to sell won't sell for as much (because mortgages for house will cost people more), which means we would end up taking a loss on our mortgage (because even though our monthly payment is the same as the new loan, the total value of the old loan is a lot higher).
Of course, prices for houses don't move nearly as much when interest rates change as they should (relative to mortgage purchasing power). This is for many reasons, but part of it is because when rates are high, people (like me) don't want to sell their house and have to lose their really good mortgage, so fewer houses are on the market, which inflates prices. When rates go down, more people want to buy and sell houses, because they can both get more for their house they are selling and they can afford bigger mortgages on their new houses, which inflate prices.
Basically, this lack of mortgage liquidity works to keep housing prices high. When rates are high, no one wants to sell OR buy, and when rates are low, everyone wants to sell AND buy. Both result in prices being high.
30 year fixed mortgages are just a really weird financial product that has all sorts of market disrupting effects. You can pre-pay them whenever you want, so when rates are low, high rate loans are paid off and low rate loans replace them, but that means no one wants to sell their house and lose their great loan when rates are high. This means housing prices soar when rates are low, but don't come back down when rates are high. It creates a ratcheting effect on house prices, which is why so few people are able to buy houses.
This continues until the entire market collapses, like it did in 2007, and then the process repeats.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#26God I wish we had 30 year fixed mortgages here in Australia. Imagine getting one of those during covid when rates were below 3%. Incredible.
Haha, wait until you hear about our fancy 50-year mortgages we'll be getting any day now! But seriously, my favorite discovery when researching CU mortgages is the prevalence of the 15/15 ARM. It's fixed for 15 years, and then adjusts once. Most people refinance within 7 years, or move within 12. So it's like a 30Y fixed, but comes in at 20 basis points cheaper (0.2% lower APR).
It could be much longer if there was a sensible formula to predict remaining value. Construction quality plays to small a role in valuations.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#27Earlier quoted context omitted.
There are downsides. I have a really great rate on my mortgage, but our house is super expensive and small for our family… but now we can’t afford to move. If we moved to a new house, we would have to pay off this great mortgage and get a new one, at a much higher interest rate. Even if we found a house that cost the exact same as ours, the monthly payment would be 50% higher, because current interest rates are more…
If you were looking to buy a house right now, you'd be looking at a bunch of options that are worse than what you currently have. You experience this as lock-in but in reality the "problem" is just that you have something significantly better than anything you (or others) can find on the market right now. And of course that's actually a fantastic boon.
But part of that is because people who would otherwise want to sell their house are choosing NOT to, because they don't want to lose their great mortgage. If we didn't have these long, fixed rate, mortgages, there would be a lot more housing liquidity and prices wouldn't be so inflated.
Now, there is a cycle of "rates go down, there is a flurry of re-finances and everyone locks in the lower rates and new buyers enter the market, and housing prices go up and up", and then rates go up, but housing prices don't go down because people can't afford to buy the houses at the same prices anymore, and so no one wants to sell (because the current owners are paying below market rates for their mortgage, so they face no selling pressure like they would if there WEREN'T long term fixed rate mortages), so there is no decrease in prices.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#28God I wish we had 30 year fixed mortgages here in Australia. Imagine getting one of those during covid when rates were below 3%. Incredible.
I have friends on 1% fixed rates over 30 here in Denmark. Bastards.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#29Earlier quoted context omitted.
There are downsides. I have a really great rate on my mortgage, but our house is super expensive and small for our family… but now we can’t afford to move. If we moved to a new house, we would have to pay off this great mortgage and get a new one, at a much higher interest rate. Even if we found a house that cost the exact same as ours, the monthly payment would be 50% higher, because current interest rates are more…
Do 30-year mortgages make the other houses more expensive somehow? It sounds like you got a good deal and any change would be worse than the good deal you got. I'd appreciate it if I was you. Edit: unless you mean that the downside of 30-year mortgages is you hardly get to pay off the principal in the first several years and don't build much equity maybe? That's more a "long mortgages" thing.
> Do 30-year mortgages make the other houses more expensive somehow?
OP didn't mean to say this, but yes, unfortunately they do. Anything that "increases affordability" will result in an eventual increase in the principal value for things that are supply constrained.
Re: Show HN: I built a dashboard to compare mortgage rates across 120 credit unions
#30God I wish we had 30 year fixed mortgages here in Australia. Imagine getting one of those during covid when rates were below 3%. Incredible.
There are downsides. I have a really great rate on my mortgage, but our house is super expensive and small for our family… but now we can’t afford to move. If we moved to a new house, we would have to pay off this great mortgage and get a new one, at a much higher interest rate. Even if we found a house that cost the exact same as ours, the monthly payment would be 50% higher, because current interest rates are more…
What’s the alternative that’s better? Having a 5/1 or 1/1 ARM just means that your current house’s mortgage would also be more expensive because your 3% mortgage would have adjusted upward by now.
If you’re willing to have your current mortgage be more expensive to avoid the “downside of being locked into a low payment, you could just pretend your mortgage had adjusted and go buy a house that suits your needs better.